Contractual Terms

Contractual Terms









Contractual Terms

By Igor Sterzhantov©2011

www.lawandsea.net



Introduction................................................................................................................................................... 1



Condition and warranty................................................................................................................................. 1



Innominate term ............................................................................................ Error! Bookmark not defined.









Introduction

Considering the contract as an exchange of binding promises it can be said that any breach of such

promise by the party in fault gives to the innocent party a right to seek for appropriate remedies, unless

liability for breach in question expressly excluded1. In many cases contract specifically provides for

remedies available to the aggrieved party, in all other instances this question to be decided by the court2.

Extent of available remedial actions depends on the nature of the terms has been breached, on

consequences, and effect of it, subject to limiting or excluding provisions, if any.



Contractual terms are distinguished from mere representations3, not intended to be promises4. In other

words, no liability can arise if statement was made without any intention to form any kind of contractual

relationship. As Lord Moulton said in Heilbut, Symons & Co v Buckleton [1913] AC 30 at p.51



… a person is not liable in damages for an innocent misrepresentation, no matter in what way or

under what form the attack is made. In the present case the statement was made in answer to

an inquiry for information. There is nothing which can by any possibility be taken as evidence of

an intention on the part of either or both of the parties that there should be a contractual

liability in respect of the accuracy of the statement. It is a representation as to specific thing and

nothing more.





Condition and warranty

Historically English law recognised a distinction between two classes of contractual terms: conditions

and warranties5. In his famous expression about peas versus beans in Chanter v Hopkins (1838) 4 M & W

399, Lord Abinger CB considered "unfortunate use made of the word warranty" at 404:







1 See exclusion clauses



2 See more on Breach page.



3 A "representation" is a statement, or assertion, made by one party to the other, before or at the time of a contract, of some

matter or circumstance relating to it, by Williams Jin Behn v Burness (1863) 3 B & S 751 at p.753.



4 Pasley v Freeman (1789) 3 Term Rep 51, Heilbut, Symons & Co v Buckleton [1913] AC 30



Igor Sterzhantov©2011 page 1

Contractual Terms



A good deal of confusion has arisen in many of the cases on this subject, from the unfortunate

use made of the word "warranty." A warranty is an express or implied statement of something

which the party undertakes shall be part of a contract; and though part of the contract, yet

collateral to the express object of it. But in many of the cases, some of which have been referred

to, the circumstance of a party selling a particular thing by its proper description, has been called

a warranty; and the breach of such contract, a breach of warranty; but it would be better to

distinguish such cases as a non-compliance with a contract which a party has engaged to fulfil;

as, if a man offers to buy peas of another, and he sends him beans, he does not perform his

contract; but that is not a warranty; there is no warranty that he should sell him peas; the

contract is to sell peas, and if he sends him any thing else in their stead, it is a non-performance

of it.



At the end of the nineteenth century, statutory intervention eventually gave the term 'warranty' settled…



Read the rest of this article on: http://www.lawandsea.net/Contract/Contract_Contractual_Terms.html









5 As Lord Denning, M.R. said in Attica Sea Carriers Corpn v Ferrostaal Poseidon Bulk Reederei GmbH (The Puerto Buitrago)

[1976] 1 Lloyd’s Rep 250 at p.253 the question whether a stipulation is a warranty or a condition has come before the Courts

for the last 200 or 300 years.



Igor Sterzhantov©2011 page 2